In a report published Wednesday, Deutsche Bank analyst Amit Mehrotra upgraded the rating on Scorpio Bulkers, Inc. (NYSE: SALT) from Hold to Buy, while raising the price target from $2 to $3. The analyst believes that there were several potential catalysts that could lead to an improvement in the sentiment on the stock, while downside was limited due to the excess cash balance.
"SALT mgmt. has provided helpful disclosures related to the amount of secured financing available and equity in SALT's held-for-sale assets," Mehrotra reported, adding, "Those details, together with proceeds from June's follow-on offering, provide SALT with plenty of cash to bridge to an upturn, in our view."
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
The analyst estimates that Scorpio Bulkers possess $190 million in true excess cash balance, which could help the company cope with significant weakness in the dry bulk market through mid-2017.
In addition, spot rates have increased in recent weeks, standing above the company's cash breakeven levels at present. The analyst also believes that Scorpio Bulkers is on track to reporting positive EBITDA for the very first time in its history in Q3.
Mehrotra believes that another catalyst for positive sentiment on the stock is that "the discount to net asset value should narrow/close as NAV becomes a better gauge of equity value in a stable/recovering environment."
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.